Using quality perceptions to segment customers in services

This study highlights some empirical considerations when using service quality as a basis for market segmentation. Past studies have been undertaken using customers’ expectations and service quality attribute importance for deriving segments and then comparing different segments across various behavioural and demographic variables. However, recent literature tends to discredit the incorporation of expectations and attribute importance in measuring service quality. Through an empirical study employing a factor-cluster analytic technique, the findings suggest that an alternative perception-based approach is more empirically sound and easy to be put into practice by both academics and practitioners.